Unveiling the nexus between foreign direct investment and economic restructuring: evidence from Vietnam's transformative journey

This study interrogates the complex dialectical relationship between foreign direct investment (FDI) and structural economic transformation in Vietnam's transitional context. While extant literature explores FDI-growth connections globally, the mechanisms through which FDI catalyses sectoral reallocation remain undertheorised in rapidly industrialising economies. Employing system GMM estimation on provincial panel data (201-2020), the epistemic trajectory reveals FDI's significant positive impact on economic restructuring - intensified by human capital development, trade openness, and institutional quality. The hermeneutic analysis uncovers a critical threshold effect, demonstrating FDI's transformative potential amplifies once inflows reach 18.5% of provincial GDP. Furthermore, substantial regional heterogeneity emerges, with North and South regions exhibiting stronger FDI-restructuring nexuses than the Central region, suggesting geographical and historical development pathways significantly moderate outcomes. This transdisciplinary scholarship contributes a sophisticated conceptual framework for understanding FDI's role in structural transformation across diverse institutional contexts.